Workday (WDAY) closed at $169.35 in the latest trading session, marking a +1.21% move from the prior day. This move outpaced the S&P 500’s daily loss of 0.4%. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq lost 4.72%.
Prior to today’s trading, shares of the maker of human resources software had gained 1.65% over the past month. This has outpaced the Computer and Technology sector’s loss of 8.46% and the S&P 500’s loss of 5.57% in that time.
Investors will be hoping for strength from Workday as it approaches its next earnings release. On that day, Workday is projected to report earnings of $0.90 per share, which would represent year-over-year growth of 15.38%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.63 billion, up 18.63% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.54 per share and revenue of $6.2 billion. These totals would mark changes of -11.28% and +20.68%, respectively, from last year.
Any recent changes to analyst estimates for Workday should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 13.18% higher. Workday is currently a Zacks Rank #2 (Buy).
In terms of valuation, Workday is currently trading at a Forward P/E ratio of 47.27. This valuation marks a premium compared to its industry’s average Forward P/E of 45.77.
It is also worth noting that WDAY currently has a PEG ratio of 2.13. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. WDAY’s industry had an average PEG ratio of 2.11 as of yesterday’s close.
The Internet – Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 63, putting it in the top 25% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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